Saturday, January 26, 2008

Calculated Risk

I've been thinking about some of the things my husband and I do that don't exactly fit the 'recommended' approach to financial security.  The one area in particular we don't fit is in the 'Emergency Fund' arena.  

Emergency funds are typically 3-6, or more, months worth of living expenses set aside in a liquid but interest bearing account (read: Money Market) that is only to be used in the event of a true emergency - job loss, the car died, etc.

 I believe in them.  As someone who transformed from a $10-to-the-next-paycheck person into someone where the need to save has taken deep root, a large e-fund is high on my list of goals. 

Right now we have a couple months worth of expenses in savings.  I'd like 12.  But we've got some other money plans that are going to delay growth of our e-fund, and I'm okay with that.  A little nervous, but overall, okay with it.

See, we want children.  At 34 and 35, we're not waiting on it.  We met in our 30s, and have achieved a great many  of our goals together, including buying a house in the spring of 2007.  

What that means is that our largest amount of savings outside of our retirement funds, which are untouchable, is directed to covering a maternity leave, which I will take unpaid.  We're in the process of building this savings up so that we still come out of a maternity leave with two full months worth of expenses saved.

I am sometimes clammy-handed in my awareness of how quickly two months can go by.  

But we will not push off a family.  Nor will we stop our renovations, which have shifted to much-needed infrastructure renovations for the most part - new wiring, new oil tanks, additional insulation, and rebuilding a small barn on our property. 

We can juggle all of this, and we will, God willing and the creeks don't rise.  It is a calculated risk, literally spent running numbers and scenarios, day after day, week after week.  

Is it the smartest decision?  Oh, I don't know.  For the financially faithful, diverting other money, like say, from the barn, might be the better option.  And in quite literal fact those folks are right.

But, see, here again is that personal aspect of personal is the right decision for us.  We will still be saving up in our emergency fund, although the funds going in have slowed from a stream to a trickle.  We have been slowly discussing what additional items can get cut or reduced from our budget.  

But I've become comfortable with our decision.  It's right for us at this point.  I've never been one of those people, who, like my husband just know it will work out. I loathe when I hear 'If you wait until you are ready for a baby you never will be'.  It's so shortsighted.

I am the type to sit there with a calculator and run every scenario.  But I'm learning to see the benefit in just a touch  - 10% maybe - of 'It will all work out'.  Because despite all my projections and calculations, it really always does.  While I've made him more frugal, he's made me worry just a little less.

I'm hardly ready to throw out my calculator.  And that e-fund is always present in the back of my mind.  

But, if we wait until we're ready for a baby, we never will be.  Ahem. 

1 comment:

Mandy said...

I totally agree. The only thing that I am adamant about is that all of our consumer debt, every last penny, be paid off before we start trying to have kids. We put money aside for annual expenses every month, and after all our debt is paid, it shouldn't take long to build up a healthier emergency fund. But yeah...if you wait until the stars align before trying, that might never happen.